Long considered an anchor of East African stability, Tanzania has recently made headlines for aggressive expansion of its mining and extractive industries. In what might be considered growing pains, economic prosperity has strained government and civilian relations, and is increasingly testing the governance skills of Tanzania’s Ministries. Adverse investment laws, widening religious conflict, and proliferation of small arms and light weapons, however, tarnish Tanzania’s image as a peaceful and prosperous republic. Continue reading →

The latest events in Latin America and the Caribbean provide good examples of the current political and economic tone in the region. On one hand, small and mid-sized economies such as Peru, Colombia, Chile and Mexico are working towards the advancement of the Pacific Alliance – an economic group whose agenda includes free trade and economic integration. On the other hand, a group of not-so-small economies still linger with populist recipes for government intervention, nationalization of companies, and manipulation of published government economic data. Continue reading →

onally for six to eight years. The common wisdom is that it has outgrown its “country of the future” label and has become a country of the post-2008 financial crisis. Investors now expect Brazil to grow into a first-world economy. Not so fast. While annual growth between 2005 and 2010 was consistently above 5%, it has stagnated since mid-2011. In 2012, its GDP grew a paltry 0.9% — the weakest of the five BRICS countries. It is time to take a cold look at whether the political factors promoting growth in Brazil between 2005 and 2010 are still operational. Continue reading →

With the investment-grade credit rating granted by Fitch Ratings in March, an improved international business reputation, and sound fiscal management, the Philippines is poised to become the next foreign direct investment (FDI) destination of Asia. Other conditions for a robust investment climate are in place: a large market, skilled human capital, youthful population, and strategic location that connects population centers across Asia. Also, the Philippines is increasingly open to international trade. By 2015, Southeast Asia will have the advantage of a single market through the Association of Southeast Asian Nations Economic Community (ASEAN). According to data provided in the World Economic Forum’s Global Enabling Trade Report 2012, the country’s macroeconomic fundamentals are strong, making it attractive to at least a fraction of the foreign investors concerned over the Euro crisis.

Despite the improvement in the Philippine investment climate, the Philippine Constitution (1987) still has an antiquated article that supports laws restricting foreign ownership of property to 40% (Article XII), with minor adjustments and deviations by subsequent legislation. Removing the clause, and improving access and protections of foreign-owned business, would lead to a quantum leap in FDI and Philippine economic growth. Small changes to legislation are not enough. The Constitution needs to be changed in order to fully welcome foreign investors to the Philippines. Continue reading →

The US and NATO could be pursuing a strategy of adding fuel to the fire in Syria. The Government of Syria has been allied with Iran, and irritated the US and NATO from a nonproliferation perspective, for a long time. The US has consequently wanted to destabilize the Syrian Government. Now, that wish has been met. The Syrian Government is in a counterinsurgency against rebels that are closely allied with Al Qaeda. Other than humanitarian considerations, the US and NATO should be quietly overjoyed that two enemies are fighting. Continue reading →

By Anders Corr, Ph.D. On Sunday and Monday in Dhaka and Chittagong, Bangladesh, from 70,000 to 200,000 Islamist protesters called for adoption of Islamic law (Sharia) by the secular government. The government responded with force to related road blockages, violent riots, and primitive thrown explosives. The government use of force included some live fire, and a total of approximately 37 killed over two days. That number will likely rise, and thrice that number were likely wounded. The largest opposition party, which is allied with the Islamists, called for a 2-day general strike (WSJ, NYT, CNN, WP, AJ). Footage of the protests is below, courtesy of Associated Press.

The effects of such force will be to increase the number and militancy of islamists in Bangladesh. A minority will likely turn to more subversive violence, such as terrorist assassinations, extortion, and bombings. Such action and reaction by the government and protesters has no obvious resolution in sight. Combined with Islamist anger at continuing legal proceedings against prominent Islamist politicians and public anger at mounting factory deaths, the last two days is likely a turning point for Bangladesh’s stability — in a decidedly negative direction. At least some of this increasing unrest may soon target foreign visitors, investments, and suppliers in the country.

A new Israeli-Palestinian peace initiative promoted by Secretary of State John Kerry today in Israel is unlikely to bear fruit, especially in the short-term. Secretary Kerry unveiled the plan, which is purposefully non-specific. It includes meager US-funded economic incentives, and a call for supporting the Arab League’s 2002 proposal for Israel to accept the pre-1967 border in exchange for recognition (WSJ).

Israel will not accept the 1967 borders, and any proposal for the same is an attempt to solicit Arab nations on other issues. Likewise, Palestinians will not be influenced by scarce development funding available from the Department of State. Such development funding is the price of admission for a new peace initiative, another in a string of de rigueur Israeli-Palestinian peace processes led by successive US Secretaries of State. Continue reading →

The Obama administration is currently under pressure by certain US lawmakers, as well as Britain, France, and Israel, to take limited military action in Syria. These actions could include securing a humanitarian corridor into the country, providing military equipment to the non-Al Qaeda affiliated Free Syrian Army (FSA) and Syrian Opposition Coalition (SOC), and destroying the Syrian Air Force (WSJ).

Such measures might remove a bit of pressure from rebels and provide a public opinion boost to current participating governments in the US, France, and Britain, in that voting publics in those countries would feel that their governments were doing something positive to end the Syrian crisis. However, due to the limited nature of the proposed military measures, they would not alter the balance of forces on any side of the complex conflict and could lead to notable negative consequences. Continue reading →

Recent negotiations initiated by South Korea with the United States to obtain acquiescence for South Korean production of nuclear fuel show that South Korea is serious about improving its energy and security independence from the United States. Such moves are a response to growing public opinion pressure in South Korea, which perceives the need for a stronger and more independent counterweight to North Korean threats. Such steps in the fuel production cycle could eventually lead to an independent South Korean nuclear weapons capability (WSJ).

The United States seeks to assure its ally verbally, and with military training exercises, overflights, advanced fighter presence, and naval destroyer movements. But relying on an outside deterrent has become increasingly unnerving to the South Korean public. While the United States and its allies won the Cold War against the Soviets, the United States appears to be overstretched on the global stage from a South Korean perspective. Eleven years of war against terror have not yielded a clear victory. China is ascending. Nuclear proliferation edges forward, with recent proliferators being India, Pakistan, Israel, and as recently as 2006, South Korea’s belligerent neighbor North Korea. Deterrence pro tem would increase deterrence of North Korean belligerence. Continue reading →

Today North Korea put their medium-range missiles on combat alert and repeated threats against US military bases including in South Korea, Guam, and Hawaii. The US Defense Department sent a strong signal by flying two nuclear-capable B-2 Stealth Bombers over South Korea in training exercises, and through comments to the press by the Defense Secretary that indicate a readiness for conflict should that be necessary. A Defense Department spokesman softened those comments by reiterated that the US seeks to deescalate tensions, and that the important goal is to stay ahead of North Korea in terms of its capability to marry a nuclear warhead with a missile delivery vehicle (CNN). However, a potentially greater threat from North Korea is an unconventional or terrorist delivery of nuclear or other weapons of mass destruction (WMD). Were a nuclear device to explode in a major port city, for example, it would likely cause up to one trillion dollars of damages, 500,000 deaths, and $40-70 billion in trade losses (Bloomberg. Congressional Research Service).

It is unlikely that the North Koreans would follow-through on their most recent threats, and unlikely that were they to try, a missile strike would be effective. The North Koreans are having difficulty with the technical challenges of component miniaturization that would allow them to place a nuclear warhead on a missile. To stave off such an attack in the future, the US must nevertheless maintain robust intelligence, deterrent, and preemptive strike capabilities. North Korea could provide us with an unpleasant surprise. Saddam Hussein surprised the world in 1990 with the progress he had made towards achieving nuclear status, and there is much more technological improvement in rogue state nuclear capabilities twenty years later.

China and Russia are likely sharing, to a limited extent, nuclear technologies with Pakistan, Iran, and North Korea. These rogue states are likely sharing with each other as well. This sharing does not necessarily have to be state-sanctioned. A poorly-supervised agency within a rogue state would have the capability to proliferate nuclear or other WMD technologies without the knowledge of its government. Many individual scientists or government officials in these corrupt countries, if offered sufficient incentive, would likely be willing to share technological expertise or hardware necessary for the making of blueprints or reverse-engineering.

Staying ahead of North Korean improvements is a challenging task, and risky. As Defense Secretary Donald Rumsfeld famously said, “There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.” (Press Briefing, February 12, 2002)

The risk is not only that North Korea has a nuclear delivery capability about which we are unaware, but that they could be considering unconventional approaches to delivery. These approaches could include smuggling a nuclear weapon into the United States, Japan, or South Korea. Radiation detection used on all containerized cargo coming into the United States does not effectively detect nuclear materials encased in lead. X-ray scanning, which might detect such encased materials, is only used on 4% of the highest-risk cargo inbound to the United States. The Department of Homeland Security has found it impractical to implement a 2007 Congressional mandate to scan 100% of incoming containerized cargo (Bloomberg). Implementation of scanning and detection technologies is currently insufficient to guard against nuclear terrorists or rogue states that use containerized cargo as a delivery vehicle.

North Korea could also simply drive nuclear materials and components across the Canadian or Mexican borders, or smuggle them on fast boats from a nearby Latin American country. Such components can be reassembled once in the United States.

Finally, North Korea is in a unique position to use biological weapons of mass destruction. Often referred to as a hermit kingdom, North Korea has the world’s strictest restrictions on immigration and emigration. This makes them relatively invulnerable to blowback from a biological WMD. The most dangerous biological weapons are highly contagious. Contagion through humans is the delivery vehicle. Thus a strong disincentive for use of biological weapons by non-secluded states is the danger that the contagion will spread to one’s own country. This applies to a much lesser degree for North Korea. Biological weapons have the advantage over nuclear weapons in that they cannot be detected by radiation detectors or x-ray scanners, can be produced by small teams of bio-chemists with relatively ordinary lab equipment, and would be easily smuggled in containerized cargo. North Korea certainly has the capability to construct such weapons, and Defense Secretary Rumsfeld’s “unknown unknowns” applies. Finally, unconventional delivery of WMD has the advantage over missile delivery for North Korea in that its origin is less traceable.

The United States came close to a preemptive strike against North Korean nuclear capabilities in the 1990s. While there are certainly risks of retaliation against regional US bases and allies, such a strike is still on the table as a policy option. It could have a salutary demonstration effect for other rogue states and proliferators, including Iran and Pakistan. The option of waiting, and continued technological development by a belligerant and immature North Korea, could make it impossible to take such actions in the future.